Foxtrot International and its partners in the CI-27 licence have reached a deal to invest in the area to keep gas flowing to power plants.
The block provides almost three-quarters of Cote d’Ivoire’s gas needs. The agreement extends the licence until August 2034 and increases the price of gas. In return, the partners have agreed to invest around $100 million on developments, which will cover onshore processing facilities and pipelines to the new power plants.
Five wells are also planned to be drilled on the licence over the period, in order to increase the production capacity. Foxtrot’s share of spending on the works is estimated at $24mn.
RAK Petroleum has an indirect stake of 33.33% in Foxtrot and disclosed the agreement in its annual report.
The Foxtrot gas field began producing in 1999 with the Mahi field following in 2012 and Marlin and Manta in 2016. Foxtrot has a 24% stake in the block and is the operator. State-owned Petroci has 40%, SECI 24% and Energie de Côte d’Ivoire (ENERCI) 12%.
Gas from CI-27 is transported onshore to power plants in Abidjan under a gas sale and purchase agreement signed in June 1999, running to 2024. The take-or-pay deal remains at 140 million cubic feet (3.96 million cubic metres) per day.
Under the new deal, signed with the government in February this year, the base price paid for gas has increased to $6 per million Btu, while the indexation formula remains the same.
Foxtrot posted a profit for 2019 of $32mn. RAK said it had received $16.6mn from its Foxtrot stake during the year and said future spending would come from operating revenue. There has been much less impact on gas sales by Foxtrot versus RAK’s other major interest, a 44.37% indirect stake in oil producer DNO.
RAK has a Netherlands’ based subsidiary which has a 100% stake in Mondoil Enterprises. This owns a 50% stake in Mondoil Cote d’Ivoire, which has a 66.66% stake in Foxtrot.
Foxtrot also has 24% stakes in CI-502 and CI-12, where it works alongside SECI and Petroci. In February, the partners begun work to relinquish CI-502. SECI is a subsidiary of SCDM Energie, which is linked to France’s Bouygues family.